Dwire v. State

• Decision Date: 18 February 1986
• Docket Number: Nos. C4-85-1297,CX-85-1420 and C3-85-1422,CX-85-1420,s. C4-85-1297
• Citation: 381 N.W.2d 871
• Parties: James Allen DWIRE, petitioner, Appellant (C4-85-1297), Fred Hendrickson, petitioner, Appellant (), Lowell David Kramer, petitioner, Appellant (C3-85-1422), v. STATE of Minnesota, Respondent. Nos. C4-85-1297, and C3-85-1422.
• Court: Minnesota Court of Appeals

Page 871

381 N.W.2d 871

James Allen DWIRE, petitioner, Appellant (C4-85-1297) Fred Hendrickson, petitioner, Appellant (CX-85-1420) Lowell David Kramer, petitioner, Appellant (C3-85-1422), v. STATE of Minnesota, Respondent.

Nos. C4-85-1297, CX-85-1420 and C3-85-1422.

Court of Appeals of Minnesota.

Feb. 18, 1986.

Review Denied April 11, 1986.

Syllabus by the Court

Grand jury indictments should have been dismissed because of the presence of an unauthorized person in the grand jury room.

Peter Thompson, John W. Lundquist, Minneapolis, for James Allen Dwire.

Paul W. Rogosheske, South St. Paul, for Fred Hendrickson.

John L. Holahan, Jr., Edina, for Lowell David Kramer.

Hubert H. Humphrey, III, Atty. Gen., Peter Kasal, McLeod Co. Atty., Glencoe, for the State.

Heard, considered and decided by WOZNIAK, P.J., and FORSBERG and NIERENGARTEN, JJ.

OPINION

WOZNIAK, Judge.

This is a consolidated appeal involving grand jury indictments brought against James Dwire, Fred Hendrickson and L.D. Kramer for multiple counts of theft, Minn.Stat. § 609.52 (1984), and diversion of corporate property, Minn.Stat. § 300.60 (1984). The trial court refused to dismiss the indictments. We granted discretionary review and reverse, dismissing the indictments.

FACTS

James Dwire and Fred Hendrickson formed America Energy Farming Systems, Inc. (AEFS) in 1981 to develop, promote and market the Jerusalem artichoke as a potential source of energy, food and livestock feed. L.D. Kramer, a former television evangelist, became involved later as a consultant. The company made various sophisticated presentations to farmers extolling the virtues of the Jerusalem artichoke, which is a species of sunflower. AEFS took in millions from approximately 2,400 farmers who contracted to buy seed and grow the plant. In December 1981, the Minnesota Attorney General's office began an investigation into possible fraudulent marketing procedures. Meanwhile, AEFS was doing business in over 30 states and other states began investigations. By the fall of 1982, the Jerusalem artichoke became the subject of several negative reports. These reports commented on the impracticalities of the crop because of the great expense involved in obtaining fructose and alcohol as a by-product. Dwire and other officers of AEFS allegedly made extensive draws from AEFS assets for personal expenses or private business ventures. In March 1983, AEFS settled with the Minnesota and Iowa Attorney General's offices. AEFS agreed to pay $40,000 in fines, discontinue the marketing program they were using, and offer refunds to growers. No criminal charges were brought. With potential refunds of $18 million, AEFS filed for bankruptcy in May 1983. The bankruptcy matter is still pending. ¹

The McLeod County Attorney impaneled a grand jury to investigate AEFS, apparently in response to local residents who never got refunds. Various grand jury witnesses were subpoenaed to appear at a motel room in Marshall, Minnesota and at the McLeod County Attorney's office in Glencoe. The investigation ended in September 1984.

The McLeod County Attorney then convened a successor multi-county grand jury to continue the investigation, encompassing McLeod, Redwood, Lyon, Sibley and Renville Counties. On October 15, 1984, Linda Shamla, a paralegal from the county attorney's office, testified before the grand jury. She testified that she became involved in the investigation of AEFS in September 1982, assisting another investigator. She interviewed at least 20 witnesses (some prior to testifying before the grand jury), prepared reports concerning her activities, participated in undercover activity by posing as a potential customer, and prepared analyses of financial documents.

Following her grand jury testimony, Shamla remained in the grand jury room during the testimony of other witnesses. She marked and handed exhibits to the McLeod County Attorney. The grand jury transcript includes many references to "Miss Shamla indicating on exhibit," but Shamla testified at a subsequent hearing to reconsider a motion to dismiss the indictment that she only marked the exhibits. Appellants allege that she gestured and indicated to the grand jury how various exhibits fit into previously marked flowcharts. Shamla was present for the testimony of seven grand jury witnesses. ²

Indictments were returned against Dwire, Hendrickson, and Kramer for theft and diversion of corporate property. The trial court denied their motion for dismissal based on the unauthorized presence of Shamla in the grand jury room and denied a later motion for reconsideration. We granted discretionary review.

ISSUES

1. Does the presence of an unauthorized person in the grand jury room require dismissal of an indictment?

2. Was Shamla an unauthorized person in the grand jury room?

ANALYSIS

I.

Minn.Stat. § 628.63 (1984) provides, in part:

The persons specified in Rule 18.04 of the rules of criminal procedure may, subject to the conditions specified in that rule, be present before the grand jury when it is in session, but no person other than the jurors may be present while the grand jury is deliberating or voting.

Minn.R.Crim.P. 18.04 provides:

Attorneys for the State, the witness under examination, interpreters when needed, and for the purpose of recording the evidence, a reporter or operator of a recording instrument may be present while the grand jury is in session, but no person other than the jurors may be present while the grand jury is deliberating or voting. Upon order of court and a showing of necessity for the purpose of security, a designated peace officer may be present while a specified witness is testifying. If a witness before the grand jury so requests and has effectively waived his immunity from self-incrimination, his attorney may be present while the witness is testifying, provided the attorney is then and there available for that purpose or his presence can be secured without unreasonable delay in the grand jury proceedings. The attorney shall not be permitted to participate in the grand jury proceedings except to advise and consult with the witness while he is testifying.

(Emphasis added.)

Accordingly, there is specific authority for the dismissal of an indictment based on the presence of an unauthorized person during the presentation of evidence to the grand jury. Minn.Stat. § 630.18 (1984); Minn.R.Crim.P. 17.06, subd. 2(1)(f).

The sparse case law in Minnesota is of the view that presence of an unauthorized person requires dismissal of an indictment without a need to show prejudice to the accused. State v. Ernster, 147 Minn. 81, 85-86, 179 N.W. 640, 642 (1920); State v. Slocum, 111 Minn. 328, 330-31, 126 N.W. 1096, 1096-97 (1910). In Slocum, a third party was present in the grand jury room during the testimony of a grand jury witness. The supreme court stated:

[I]t clearly appears that [the third party] was present during the examination of the witness Rhoda. Section 5338 provides that an indictment shall be set aside by the court (subdivision 3) "whenever a person shall have been permitted to be present at the session of the grand jury while the charge embraced in the indictment was under consideration * * *." * * * [I]t does not follow that any other person may be present at such time. A case is under consideration before the grand jury, within the meaning of section 5338, when witnesses are being examined. Hence [the third party] was present in the grand jury room with the grand jurors during the time they had the matter of this indictment under consideration.

The facts stated were uncontradicted, and the action of the grand jury was unwarranted, contrary to law, cannot be upheld, and the indictment should have been quashed.

Id., 111 Minn. at 330-31, 126 N.W. at 1096-97.

In Ernster, the court also dealt with the presence of unauthorized persons, a committee of three appointed by a previous grand jury. The court's discussion included the following:

Here evidence, illegal or hearsay, to be sure, was given the grand jury, and the case was discussed when persons not authorized to be present were present. The minds of the jury must have considered and laid hold of the case when they heard what purported to be the facts or evidence in respect to it. On the testimony above referred to we think it clearly appears that the indictment should have been quashed.

The common law respecting grand jury functions, as supplemented by our statutory enactments, clearly intends that there shall be no star chamber proceedings at which persons may come, either by delegations or singly, to advise or urge action on the part of the jury whether to indict or to find a no bill. It is supposed that witnesses only shall appear, one at a time, and give competent evidence, and upon evidence so given, and that alone, the jury are to determine whether a person should be accused of crime. If those interested in prosecuting may send a delegation to the grand jury to induce the finding of a bill, so may the criminal send his delegation and lawyer to persuade that no bill be found. The grand jury is supposed to be a fearless and impartial investigator of crime, and to the more fully accomplish this purpose the law seeks to provide against every influence of outsiders, and specifies that the mere presence of an unauthorized person when a witness testifies, or when the case is discussed, or the vote taken, is fatal to the indictment.

Ernster. 147 Minn. at 85, 179 N.W. at 641-42.

This view is also the uniform view of the federal courts which have interpreted Fed.R.Crim.P. 6(d), the federal counterpart and the model for Minn.R.Crim.P. 18.04. Latham v. United States, 226 F. 420, 424 (5th Cir.1915); United States v. Virginia-Carolina Chemical Co., 163 F. 66, 75-76 (M.D.Tenn.1908); United States v. Edgerton, 80 F. 374, 375-76 (D.Mont.1897); United States v. Pignatiello, 582 F.Supp. 251, 254-55 (D.Colo.1984); United States v. Gold, 470 F.Supp. 1336, 1356 (N.D.Il...